As noted earlier, Nashville Chancery Court Chancellor Ellen Hobbs Lyle rejected Billy Corgan’s request for an injunction against Impact Ventures and Dixie Carter and dissolved his temporary restraining order. Since the initial report, more details have been published by Nate Rau of the Tennessean.
One of the key rulings in Hobbs Lyle’s decision was that a loan agreement signed between Dixie Carter and Billy Corgan was not binding under Tennessee law. This meant that Corgan was not entitled to invoke the contractual clause that would permit him to take over Dixie’s shares of the company. Hobbs Lyle said that this fact, combined with questions regarding TNA’s solvency, compelled her to decide as she did.
In Hobbs Lyle’s decision, she said:
“The (relevant section) of the pledge agreement, the court concludes, was not implemented in accordance with Tennessee law and the LLC operating agreement, and Section 6 is, therefore, unenforceable to remove the defendant LLC managers. As to the occurrence of a default by way of insolvency, there has not been demonstrated a substantial likelihood of success on the merits because the operative text of the pledge agreement, ‘becomes insolvent,’ is ambiguous when applied to the facts of record.”
Corgan did take to Twitter to comment on the ruling, saying that he was not disappointed with the result (shown below). He noted that the proceedings brought out “facts which illuminate business practices I have fought against for a reason” and was grateful that the case was heard. While TNA’s attorney, Travis Parham, declined comment, Corgan’s attorney, Scott Sims, did comment in a statement to the Tennessean as follows:
“Mr. Corgan understands that temporary injunctive relief is an extraordinary remedy and, due to the nature of the proceedings, he did not have full access to information in the defendants’ possession that bears on the issues in this case. Mr. Corgan looks forward to the opportunity to conduct full discovery into these matters and present his case in its entirety to the Court at a later date.”
Bill Says: Industry insiders aren’t really surprised by this ruling, and I don’t know that I am either. Many of the documents are public record, and while there’s a lot of “legal mumbo-jumbo” in there based on what I read I kind of felt like the agreement between Corgan and Carter would be shot down as unenforceable. Given Sims’ statement, the legal side of this may indeed not be over from Corgan’s side.
The fallout will be interesting. Anthem Sports and Entertainment, owners of Fight Network, has offered to pay Corgan the money he loaned to Dixie. There’s a common belief that Anthem will be buying up majority control of TNA, and Jason Brown of Aroluxe will manage the business side of the company. Dixie would then remain with the organization in a minority role of some sort. I’m sure we’ll be watching with some level of interest as to where things head from here.